We asked our clients why they wait so long before considering using a collection agency to manage their accounts receivable, and should it become necessary, collect old debt. We discovered 3 Top Reasons:
- High Cost Factor: Contingency based collection agencies are expensive, often taking 30-50% of what is collected, and they aren’t very good at collecting, boasting a woeful industry average of 14%.
- Alienation Factor: Our clients don’t want their customers alienated, and like any business person, they would like to get their money collected and keep their customers.
- Control Factor: Our clients feared a loss of control because most collection agencies instruct the debtor to pay the agency or to call the agency.
In order to motivate our clients to entrust us with their accounts we had to eliminate these 3 concerns, and convince them that to increase their cash flow and prevent traditional debt collection we need to get involved much earlier in the aging process — as early as 30-45 days past due.
So, what did we do? We eliminated those three concerns!
We counter the high cost factor with a fixed-fee model. Consider these numbers. A contingency agency is given an account of $1,000. They collect the total amount and for their efforts receive between $3-500. We do the same thing, more effectively – often at a recovery rate of 75% not 14%, at an average account cost of $13. Hmmmm, I’m no mathematician, but . . .
We counter the alienation factor with diplomatic pre-collection services such as:
- First Party Demand Letters – Customized with your business logo and address for immediate attention to the debt.
For more aged receivables we offer:
- Collection Letters – Written demands that provide the impact of third party intervention. Choose from three service types: diplomatic, intensive or NSF.
- Collection Calls – An effective system of verbal demands for stubborn or older accounts. A professional collection team works every account regardless of size.
We countered the control factor by leaving control in our client’s . . . well, control. It’s really that simple. We refer your customer to you for payment arrangements. For more information, shoot us an email or call toll-free (800) 360-2827.